Need guidance with PostProcess Blendable

thats pretty easy, you just do MIN operation on scene depth, and ray length to the water plane.

Length to waterplane can be calculated like:

(WaterZ - CameraPosition.Z) / CameraVector.Z

Then you just do a Min with that and SceneDepth.

I also suggest you use ExponentialDensity and not just a linear blend, since a linear blend will look very artificial.

FWIW this is the same thing I originally suggested (bounding by Z), and BoxMask was only a suggestion if you need a box like a fish tank or something where you can see out.